What is a Value Added Reseller?

1. Introduction

A Value Added Reseller (VAR) is a crucial component of many partner ecosystems, acting as an intermediary that enhances a vendor's core offering before delivering it to the end customer. Unlike a simple reseller who merely distributes a product, a VAR integrates additional services, software, hardware, or specialized expertise to create a more comprehensive and valuable solution. This added value can manifest in various forms, such as custom configurations, installation, training, ongoing support, or industry-specific adaptations.

The role of a VAR is to bridge the gap between a vendor's standardized product and a customer's specific needs, often in niche markets or complex environments. By bundling these complementary services, VARs enable customers to achieve greater utility and efficiency from the original product than they would if purchased directly from the vendor. This model benefits both the vendor, who gains extended market reach and specialized delivery capabilities, and the customer, who receives a tailored, ready-to-use solution.

2. Context/Background

The concept of value-added reselling evolved as technology became more complex and customer needs grew more specialized. Early hardware manufacturers realized that selling a bare-bones product often required significant customer effort to integrate and operate. VARs emerged to fill this gap, offering expertise in specific operating systems, networking, or industry applications. In the modern era, with the proliferation of software-as-a-service (SaaS) and cloud computing, VARs have adapted to provide integration services, data migration, customization, and managed services. This model is particularly relevant in industries like IT, telecommunications, and specialized manufacturing, where solutions often require deep technical understanding and ongoing support.

3. Core Principles

• Solution-Centric Approach: VARs focus on delivering complete solutions, not just individual products.
• Customer-Specific Customization: They tailor offerings to meet the unique requirements of each client.
• Deep Product Knowledge: VARs possess expert-level understanding of the vendor's products and how they integrate with other systems.
• Specialized Expertise: They often develop expertise in specific industries, technologies, or business processes.
• Ongoing Support and Services: Value addition extends beyond the initial sale to include implementation, training, and post-sales support.

4. Implementation

1. Identify Target Market and Vendor: Pinpoint a specific market need and a vendor whose products can address it.
2. Develop Value-Added Services: Design services (e.g., installation, customization, training, support) that complement the vendor's product.
3. Establish Vendor Partnership: Enroll in the vendor's partner program, leveraging resources like a partner portal and partner enablement tools.
4. Acquire Technical Expertise: Train staff on the vendor's products and the developed value-added services.
5. Market and Sell Solutions: Position the bundled solution to target customers, often utilizing co-selling strategies with the vendor.
6. Provide Post-Sales Support: Deliver ongoing services to ensure customer satisfaction and foster long-term relationships.

5. Best Practices vs Pitfalls

Best Practices (Do's)

• Focus on a Niche: Specialize in a particular industry or technology to build deep expertise. For example, an IT VAR focusing solely on healthcare data security solutions.
• Invest in Training: Continuously educate your team on vendor products and emerging technologies.
• Strong Customer Relationships: Build trust through excellent service and proactive support.
• Leverage Vendor Resources: Actively use the vendor's partner portal for marketing materials, training, and deal registration.

Pitfalls (Don'ts)

• Becoming a "Box Mover": Failing to genuinely add value beyond simply reselling a product.
• Lack of Differentiation: Offering generic services that don't stand out from competitors.
• Poor Vendor Alignment: Not understanding the vendor's roadmap or lacking consistent communication.
• Underestimating Support Needs: Providing inadequate post-sales support, leading to customer dissatisfaction.

6. Advanced Applications

1. Managed Services Provider (MSP): Evolving from a traditional VAR to offer ongoing management and monitoring of IT infrastructure.
2. Cloud Solution Provider (CSP): Specializing in deploying, migrating, and managing cloud-based vendor solutions.
3. Industry-Specific Vertical Solutions: Developing highly specialized bundles for a narrow market segment, e.g., manufacturing VAR creating custom automation solutions for specific production lines.
4. Integration Specialist: Focusing on connecting disparate software and hardware systems for complex enterprise environments.
5. Consulting and Advisory Services: Offering high-level strategic guidance alongside product implementation.
6. Custom Software Development: Developing proprietary software that integrates with and enhances a vendor's platform.

7. Ecosystem Integration

VARs are central to the partner ecosystem lifecycle across multiple pillars. During Strategize, vendors identify VARs to reach specific markets. In Recruit, vendors actively seek VARs with complementary skills. Onboard and Enable phases provide VARs with necessary training and tools, often through a partner portal. Market and Sell involve VARs actively promoting and selling solutions, frequently engaging in co-selling with the vendor and using deal registration to track opportunities. Incentivize ensures VARs are rewarded for their value-added contributions, and Accelerate focuses on joint growth initiatives, often driven by the success of VAR-delivered solutions. Their ability to deliver complete solutions significantly amplifies the vendor's market impact.

8. Conclusion

The Value Added Reseller model remains a cornerstone of successful partner ecosystems, enabling vendors to expand their reach and customers to receive tailored, comprehensive solutions. By focusing on specialized expertise and delivering significant value beyond the core product, VARs create a win-win scenario for all parties involved. Their role is dynamic, evolving with technology to continue addressing complex customer needs.

Effective partner relationship management and robust partner programs are critical for fostering strong VAR relationships. As businesses increasingly seek integrated solutions rather than standalone products, the importance of VARs in delivering these complete, value-rich packages will only continue to grow.